IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/54721.html
   My bibliography  Save this paper

Political environment a ground for public sector corruption? Evidence from a cross-country analysis

Author

Listed:
  • Kumara, Ajantha Sisira
  • Handapangoda, Wasana Sampath

Abstract

This study employs the instrumental variable two-stage least squares regression approach for the data for 121 countries to explore the impact of a country’s political environment on its level of corruption. The study provides strong evidence that a higher degree of rule of law, press freedom, readiness and capacity to handle e-governance practices, and urbanization are associated with a lower level of public sector corruption across all 121 countries. The colonial dummies and having a presidential government are found to be valid instruments for rule of law in addressing the issue of endogeniety embedded in it. Further, to a certain degree, landlocked countries are relatively more corrupt than costal countries. Finally, policy implications are discussed based on the findings of the study.

Suggested Citation

  • Kumara, Ajantha Sisira & Handapangoda, Wasana Sampath, 2014. "Political environment a ground for public sector corruption? Evidence from a cross-country analysis," MPRA Paper 54721, University Library of Munich, Germany, revised 22 Mar 2014.
  • Handle: RePEc:pra:mprapa:54721
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/54721/1/MPRA_paper_54721.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brunetti, Aymo & Weder, Beatrice, 2003. "A free press is bad news for corruption," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1801-1824, August.
    2. David De La Croix & Clara Delavallade, 2011. "Democracy, Rule of Law, Corruption Incentives, and Growth," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(2), pages 155-187, April.
    3. Mr. Sanjeev Gupta, 1998. "Does Corruption Affect Income Inequality and Poverty?," IMF Working Papers 1998/076, International Monetary Fund.
    4. Axel Dreher & Thomas Herzfeld, 2005. "The Economic Costs of Corruption: A Survey and New Evidence," Public Economics 0506001, University Library of Munich, Germany.
    5. Mr. Dhaneshwar Ghura, 1998. "Tax Revenue in Sub-Saharan Africa: Effects of Economic Policies and Corruption," IMF Working Papers 1998/135, International Monetary Fund.
    6. Yener AltunbaÅŸ & John Thornton, 2012. "Fiscal Decentralization and Governance," Public Finance Review, , vol. 40(1), pages 66-85, January.
    7. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
    8. Rajeev Goel & Michael Nelson, 2011. "Government fragmentation versus fiscal decentralization and corruption," Public Choice, Springer, vol. 148(3), pages 471-490, September.
    9. Ghulam Shabbir & Mumtaz Anwar, 2007. "Determinants of Corruption in Developing Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(4), pages 751-764.
    10. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
    11. Abdiweli M. Ali & Hoden Said Isse, 2003. "Determinants of Economic Corruption: A Cross-Country Comparison," Cato Journal, Cato Journal, Cato Institute, vol. 22(3), pages 449-466, Winter.
    12. Mr. Carlos A Leite & Jens Weidmann, 1999. "Does Mother Nature Corrupt? Natural Resources, Corruption, and Economic Growth," IMF Working Papers 1999/085, International Monetary Fund.
    13. Mr. Vito Tanzi & Mr. Hamid R Davoodi, 2000. "Corruption, Growth, and Public Finances," IMF Working Papers 2000/182, International Monetary Fund.
    14. Billger, Sherrilyn M. & Goel, Rajeev K., 2009. "Do existing corruption levels matter in controlling corruption?: Cross-country quantile regression estimates," Journal of Development Economics, Elsevier, vol. 90(2), pages 299-305, November.
    15. Kotera, Go & Okada, Keisuke & Samreth, Sovannroeun, 2010. "A study on the relationship between corruption and government size: the role of democracy," MPRA Paper 25015, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anaïs Valiquette L’Heureux, 2022. "The Case Study of Los Angeles City & County Fraud, Embezzlement and Corruption Safeguards during times of pandemic," Public Organization Review, Springer, vol. 22(3), pages 593-610, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rajul Awasthi & Nihal Bayraktar, 2015. "Can tax simplification help lower tax corruption?," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 297-330, December.
    2. Omar A. Guerrero & Gonzalo Casta~neda, 2019. "Does Better Governance Guarantee Less Corruption? Evidence of Loss in Effectiveness of the Rule of Law," Papers 1902.00428, arXiv.org.
    3. Blaise Gnimassoun, Joseph Keneck Massil, 2019. "Determinants of corruption: can we put all countries in the same basket?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 16(2), pages 239-276, December.
    4. Goel, Rajeev K. & Korhonen, Iikka, 2011. "Exports and cross-national corruption: A disaggregated examination," Economic Systems, Elsevier, vol. 35(1), pages 109-124, March.
    5. Yongzheng Liu & Haibo Feng, 2015. "Tax structure and corruption: cross-country evidence," Public Choice, Springer, vol. 162(1), pages 57-78, January.
    6. Eugen Dimant & Guglielmo Tosato, 2018. "Causes And Effects Of Corruption: What Has Past Decade'S Empirical Research Taught Us? A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 335-356, April.
    7. Michael Jetter & Christopher F. Parmeter, 2016. "Uncovering the determinants of corruption," Working Papers 2016-02, University of Miami, Department of Economics.
    8. Awasthi, Rajul & Bayraktar, Nihal, 2014. "Can tax simplification help lower tax corruption ?," Policy Research Working Paper Series 6988, The World Bank.
    9. Omar A. Guerrero & Gonzalo Castañeda, 2021. "Does expenditure in public governance guarantee less corruption? Non-linearities and complementarities of the rule of law," Economics of Governance, Springer, vol. 22(2), pages 139-164, June.
    10. Héctor Bellido & Lorena Olmos & Juan A. Román-Aso, 2021. "The influence of government ideology on corruption: the impact of the Great Recession," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(2), pages 677-708, July.
    11. Kodila Tedika, Oasis, 2012. "Empirical Survey on the Causes of the Corruption [Aperçu empirique sur les causes de la corruption]," MPRA Paper 41484, University Library of Munich, Germany.
    12. Joan Rosselló Villalonga, 2018. "Fiscal centralization: a remedy for corruption?," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 9(4), pages 457-474, November.
    13. Bin Dong & Benno Torgler, 2010. "The Causes of Corruption: Evidence from China," Working Papers 2010.72, Fondazione Eni Enrico Mattei.
    14. Dzhumashev, Ratbek, 2014. "Corruption and growth: The role of governance, public spending, and economic development," Economic Modelling, Elsevier, vol. 37(C), pages 202-215.
    15. Kotera, Go & Okada, Keisuke & Samreth, Sovannroeun, 2012. "Government size, democracy, and corruption: An empirical investigation," Economic Modelling, Elsevier, vol. 29(6), pages 2340-2348.
    16. Blaise Gnimassoun & Joseph Keneck Massil, 2016. "Determinants of corruption: Can we put all countries in the same basket?," Working Papers hal-04141599, HAL.
    17. repec:pdn:wpaper:79 is not listed on IDEAS
    18. An, Weihua & Kweon, Yesola, 2017. "Do higher government wages induce less corruption? Cross-country panel evidence," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 809-826.
    19. Nabamita Dutta & Deepraj Mukherjee, 2016. "Do Literacy And A Mature Democratic Regime Cure Corruption?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 41(2), pages 1-26, June.
    20. Dridi, Mohamed, 2013. "Corruption and Economic Growth: The Transmission Channels," MPRA Paper 47873, University Library of Munich, Germany.
    21. Jetter, Michael & Parmeter, Christopher F., 2018. "Sorting through global corruption determinants: Institutions and education matter – Not culture," World Development, Elsevier, vol. 109(C), pages 279-294.

    More about this item

    Keywords

    Corruption; Political Environment; Endogeniety; Public Sector;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:54721. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.